Summit Valley Industries, Inc. v. Local 112, United Brotherhood of Carpenters

Background

A modular-home manufacturer called Summit Valley Industries opened a plant in Montana and used unskilled workers employed under a Teamsters agreement. A local carpenters’ union (Local 112) challenged the work assignments, picketed, and faced Board proceedings and a district court temporary restraining order. The NLRB and an administrative law judge found the union had committed unlawful secondary and jurisdictional conduct and ordered it to stop. Summit Valley then sued under Section 303 seeking $3,675.00 in business losses and $13,604.33 in attorney’s fees from the earlier Board proceedings; the district court and Ninth Circuit awarded only business losses.

Reasoning

The Court addressed whether §303’s use of the word “damages” allows an employer to recover attorney’s fees paid during prior Board proceedings. Relying on the long-standing American Rule that fees are not recoverable except when Congress says so, the opinion found §303 contains no clear authorization for such fees. It examined the statute’s text and legislative history (including Senator Taft’s comment about “actual damages”), cited prior decisions limiting recovery to compensatory losses, and noted policy concerns about encouraging repeated fee suits and harming litigation fairness. On that basis the Court concluded attorney’s fees from prior Board proceedings are not recoverable under §303.

Real world impact

The decision means employers who win before the Board generally cannot recover the legal costs they incurred at the Board as part of a §303 claim and remain limited to compensatory business losses. Because the Courts of Appeals have split on this question, outcomes may vary regionally until there is further change in the law.